Opinion
98 Civ. 9115 (GBD)
May 15, 2002
MEMORANDUM OPINION ORDER
Plaintiff John Bal brings this action against the Police Athletic League, Inc. ("PAL") and various employees of PAL (collectively, "defendants") as a result of his termination from the position of Director of Employment at PAL. Plaintiff alleges that he was fired in retaliation for his refusal to submit false time sheets for various employees under his supervision and refusal to participate m a double billing scheme meant to defraud the City of New York and various other funding sources. Plaintiff brings a claim under 28 U.S.C. § 1983 alleging that defendants violated his First Amendment right to free speech by terminating him for refusing to participate in fraudulent activity. Plaintiff also brings state wrongful termination and breach of contract claims. Defendants move to dismiss the complaint under Rule 12 (b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. For the reasons set forth below, defendants' motion to dismiss is granted in part and denied in part.
In reviewing a motion to dismiss a complaint for failure to state a claim, a court must take the allegations in the complaint as true.Hospital v. Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 740 (1976); Miree v. DeKalb County, 433 U.S. 25, 27 n. 22 (1977). All reasonable inferences must be drawn in the plaintiff's favor. Bolt Electric, Inc. v. The City of New York, 53 F.3d 465, 469 (2d Cir. 1995). However, a court is not required to accept is true "conclusions of law or unwarranted deductions of fact." First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 771 (2d Cir. 1994), cert. denied, 513 U.S. 1079 (1995) (quoting 2A Moore Lucas, Moore's Federal Practice ¶ 12.08 at 2266-69 (2d ed. 1984)). In order to survive a motion to dismiss under Rule 12(b)(6), "the complaint must allege facts that, if true, would create a judicially cognizable cause of action." Kittay v. Kornstein, 230 F.3d 531, 537 (2d Cir. 2000) (internal citations omitted). A motion to dismiss merely addresses the legal sufficiency of a claim. See McCall v. Pataki, 232 F.3d 321, 322 (2d Cir. 2000). The complaint should be dismissed only where it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim entitling him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted); Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985).
Although a court considering a motion to dismiss for failure to state a claim is limited to the facts stated in the complaint, the complaint includes any written instrument attached as an exhibit and any statements or documents incorporated by reference therein. Paulemon v. Tobin, 30 F.3d 307, 308-309 (2d Cir. 1994). The court may not consider factual allegations in briefs or memoranda. Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir. 1988). The facts upon which the plaintiff bases his claim need not be set out in detail, but must give his adversary fair notice of the nature of his claim and the grounds upon which it rests. Greenberg v. New York State, 919 F. Supp. 637, 640 (E.D.N.Y. 1996) (citing Conley, 355 U.S. at 47). Moreover, as a pro se litigant, plaintiffs pleadings are held to a less rigorous standard than formal pleadings drafted by attorneys. Haines v. Kerner, 404 U.S. 519, 521-22 (1972); see also Hughes v. Rowe, 449 U.S. 5, 9-10 (1980). The complaint must be liberally construed and interpreted so as to raise the strongest arguments it suggests. McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999); Burgos v. Hopkins, 14 F.3d 787 790 (2d Cir. 1994).
The first and second claims of the complaint allege that defendants violated plaintiffs First Amendment right to free speech. Plaintiff brings these claims under 42 U.S.C. § 1983. To state a claim under § 1983, plaintiff must allege that defendants were acting under color of state law in depriving him of his constitutional or federal rights.See Rendell-Baker v. Kohn, 457 U.S. 830, 835 (1982). Action taken "under color of state law" is defined as "misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law." National Collegiate Athletic Ass'n v. Tarkanian, 488 U.S. 179, 191 (1988) (quoting United States v. Classic, 313 U.S. 299, 326 (1941)). In United States v. Price, 383 U.S. 787, 794, n. 7 (1966), the U.S. Supreme Court stated that "[i]n cases under § 1983, `under color' of law has consistently been treated as the same thing as the `state action' required under the Fourteenth Amendment." The issue to be determined in both contexts is whether the "alleged infringement of federal rights [is] `fairly attributable to the State[.]'" Rendell-Baker, 457 U.S. at 838 (quoting Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982)). The actions of a private entity can constitute state action where "[t]he State has so far insinuated itself into a position of interdependence with [a private entity] that it must be recognized as a joint participant in the challenged activity. . . ."Burton v. Wilmington Parking Authority, 365 U.S. 715, 725 (1961).
Defendants argue that plaintiff fails to allege that PAL is a state actor because plaintiffs allegations do not satisfy the requirements set forth in Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995). In Lebron, the Supreme Court held that "where . . . the Government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of the directors of that corporation, the corporation is part of the Government for purposes of the First Amendment." Id. at 400. Defendant characterizes this language as the Lebron test. While other courts have concluded that the Court in Lebron established a three-prong test to determine whether the actions of a private entity can be attributed to the state, see, e.g. Barrios-Velasquez v. Asociation de Empleados del Estado Libre Asociado de Puerto Rico, 84 F.3d 487, 492 (1st Cir. 1996); Hall v. American Nat'l Red Cross, 86 F.3d 919, 921-22 (9th Cir. 1996), the Second Circuit has not explicitly adopted the Lebron holding as such a test, see, e.g., Gorman-Bakos v. Cornell Cooperative Extension of Schenectady County, 252 F.3d 545, 552 (2d Cir. 2001) (indicating Court in Lebron was "specifically addressing the status of a government-created corporation as a state actor"); Hack v. President and Fellows of Yale College, 237 F.3d 81, 83-84 (2d Cir. 2000) (citations omitted) (employing Lebron analysis because it was principal case relied upon by plaintiffs, but declining to identify a definitive standard and noting that "other courts have concluded that the Court [in Lebron] set forth a three-prong standard") (emphasis added).
In Loce v. Time Warner Entertainment/Newhouse Partnership, 191 F.3d 256, 266 (2d Cir. 1999), the Second Circuit Court of Appeals stated that
[i]n order to establish a First Amendment claim against a private entity based on the entity's relationship to the state, a plaintiff must demonstrate, inter alia, a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351 (1974). In the absence of such a nexus, a finding of state action may not be premised on the private entity's creation, funding, licensing, or regulation by the government.See also Hadges v. Yonkers Raceway Corp., 918 F.2d 1079, 1081 (2d Cir. 1990) (citing Jackson 419 U.S. at 351). In Brentwood Academy v. Tennessee Secondary School Athletic Ass'n, 531 U.S. 288, 295 (2001) (citations omitted), the Supreme Court reaffirmed the use of the Jackson close nexus standard in determining whether the actions of a private entity constitute state action, holding "state action may be found if, though only if, there is such a `close nexus between the State and the challenged action' that seemingly private behavior `may be fairly treated as that of the State itself.'" The Court identified a set of facts which can be relevant in attributing private action to the state including, but not limited to, governmental control of the private entity and when the private entity is closely linked with governmental policies. Id. at 296.
Plaintiff identifies PAL as a "non-profit organization" (Complaint ¶ 2.), but alleges that PAL is a
de facto governmental agency because:
a) It is under the control of the Police Department of the City of New York and other governmental agencies.
b) It is funded by the Police Department of the City of New York and other governmental agencies.
c) Its principal office is located at 34 ½ East 12th Street, New York, New York, a building owned and maintained by the Police Department of the City of New York.
d) The Certificate of Incorporation for PAL states "That the purpose or purposes for which the corporation is to be formed and sponsored by the Juvenile Aid Bureau of the Police Department of the City of New York . . .'
e) It promotes itself as a part of the Police Department of the City of New York.
(Compl. ¶ 36.) These allegations are sufficient to state a claim under § 1983. Plaintiff alleges more than mere funding and association between PAL and the Police Department of the City of New York, he references PAL's certificate of incorporation and alleges that PAL is controlled by the police department and promotes itself as a part of the police department. Taking into consideration plaintiff's pro se status, these allegations indicate the possible presence of a close nexus between PAL and the police department as required for this Court to find that plaintiff has properly alleged that defendants were acting under color of state law. Accordingly, defendants' motion to dismiss the first and second claims of the complaint is denied.
Plaintiff brings his third cause of action for wrongful termination on the grounds that his termination violates public policy. New York courts generally hold that employees not protected by employment contracts may be terminated at any time for any reason. See, e.g. Dailey v. Tofel, Berelson, Saxl Partners, P.C. 710 N.Y.S.2d 95, 96 (2000); Sabetay v. Sterling, Drug, Inc., 514 N.Y.S.2d 209, 211 (1987); Murphy v. American Home Prods. Corp., 461 N.Y.S.2d 232, 235 (1983). Exceptions under this rule are extremely narrow. See, e.g., Weider v. Skala, 593 N.Y.S.2d 752 (1992) (holding that a discharged attorney, as an officer of the court, may bring a breach of contract claim against his former law firm where he was discharged for insisting that the law firm report incident of professional misconduct); Weiner v. McGraw-Hill, Inc., 457 N.Y.S.2d 193 (1982) (holding that an individual may bring a claim against a former employer for wrongful termination where language in the employer's personnel handbook limited the employer's right to terminate); N.Y. LAB. LAW §§ 740 741 (prohibiting health care employers from taking retaliatory personnel action against an employee who reports violations affecting public health and safety); N.Y. CIV. SERV. LAW § 75-b (prohibiting public employers from taking adverse personnel action against a public employee who reports violations affecting public health and safety).
Plaintiff does not allege that there was a contractual agreement limiting defendants' unfettered right to terminate plaintiff. Plaintiff's allegation that the director of employment told him "[i]t's hard to get fired from the Police Athletic League unless you do something really bad" does not constitute such an agreement. (Complaint ¶ 11.) Nor does plaintiff's action satisfy the statutory exceptions to the at-will employment doctrine. For example, defendants do not fall within the statutory definitions for a health care employer or public employer. N.Y. LAB. LAW §§ 740 741; N.Y. CIV. SERV. LAW § 75-b. Furthermore, this action is time-barred under those statutes because it was not brought within the limitations period. N.Y. LAB. LAW § 740(4)(a); N Y CIV. SERV. LAW § 75-b(3)(c). Thus, plaintiff has not alleged sufficient facts for this Court to conclude that plaintiff's termination falls within the narrow public policy exceptions to the general rule that at-will employees may be terminated for any reason. Accordingly, defendants' motion to dismiss the third claim of the complaint is granted.
PAL terminated plaintiff's employment on October 27, 1995. (Complaint ¶ 28.) Plaintiff began this action more than three years later on December 28, 1998.
The fourth claim of the complaint alleges breach of contract and interference with plaintiffs employment relationship. Plaintiff argues that an implied contract was formed by the statement during his employment interview by the director of employment and plaintiffs refusal of other offers of employment in order to accept the position at PAL. Plaintiff relies on Ohanian v. Avis Rent A Car System, Inc., 779 F.2d 101 (2d Cir. 1985), which held that an oral promise for lifetime employment was made where, during the course of employment negotiations, plaintiffs concerns about security were met by the employer's assurance that "[u]nless [he] screwed up badly, there is [sic] no way [he was] going to get fired . . . [he would] never get hurt here in this company." Id. at 104, 109 (alterations in original). In Ohanian, the employer essentially promised the plaintiff in that case that he would only be terminated for just cause. See Cucchi v. New York City Off-Track Betting Corp., 818 F. Supp. 647, 652 (S.D.N.Y. 1993). In the present case, the director of employment's statement to plaintiff that "[i]t's hard to get fired from the Police Athletic League unless you do something really bad" is not unequivocal as is the employer's statement in Ohanian, and cannot be construed as a promise that plaintiff would only be terminated for just cause. Furthermore, New York cases subsequent to Ohanian have held that vague oral promises that employees will not be terminated except for just cause, without more, are not sufficient to sustain a claim for breach of contract. See Cucchi, 818 F. Supp. at 653; Paolucci v. Adult Retardates Center. Inc., 582 N.Y.S.2d 452, 453 (1992); Diskin v. Consolidated Edison Co. of New York. Inc., 522 N.Y.S.2d 888, 890 (1987); Hill v. Westchester Aeronautical Corp., 492 N.Y.S.2d 789, 790-91 (1985); Gould v. Community Health Plan of Suffolk, Inc., 470 N.Y.S.2d 415, 417 (1984). Plaintiff has not alleged sufficient facts to establish that there was an implied employment contract. Therefore, defendants' motion to dismiss the fourth claim of the complaint is granted.
For the foregoing reasons, defendants' motion to dismiss the first and second claims of the complaint is denied, and defendants' motion to dismiss the third and fourth claims of the complaint are granted.